Reformation Lifts Full-Year Guidance After 19.1% Q3 Sales Jump

Reformation posted a 19.1 percent third-quarter revenue increase to $173.6 million, beating analyst forecasts by $3.9 million and extending its run of double-digit growth to 22 consecutive quarters. The result, for the quarter ended Sept. 26, prompted the company to raise full-year guidance to $610 million to $612 million, up from the prior $602 million to $606 million range.

The Los Angeles-based brand, which went public in July at $15 per share, reported a net loss of $1.1 million for the quarter. The loss stems from the tax impact of stock-based compensation tied to the IPO rather than operational weakness. Adjusted EBITDA rose 64.2 percent to $23.1 million, a pace of margin expansion that outstripped the top-line gain by more than three times.

Where the growth came from

CEO Hali Borenstein framed the performance as broad-based rather than concentrated in any single channel or region. "The growth was really broad-based across geographies, across categories and selling points," she told WWD on Thursday.

The quarter's numbers support that claim across three channels:

• Active customer file up 23.4 percent to 1.25 million
• Wholesale revenue up 40.8 percent to $20.8 million
• Seven store openings, bringing the fleet to 77 doors

Speed as a commercial lever

Borenstein credited the company's test-and-scale model for capturing demand that traditional retail calendars would miss. She described how pop colors gained profitability last spring, prompting limited-quantity testing before the company committed inventory.

"In late spring, late summer, we saw crazy momentum against purple. And so we quickly invested in more depth against the purple styles," Borenstein said. The brand added purple across multiple silhouettes and fabrications, and the color now occupies more of the site assortment than at any point in the company's history.

"We've been able to bring the right colors to the site in a time when no retailer would ever invest in purple 12 months out like this without reason to support it," she said. "You would never have that kind of conviction" under a traditional retail model.

New ideas account for at least 10 percent to 20 percent of the assortment on an ongoing basis. Borenstein said the practice keeps the line from stagnating: brands that chase trends without learning "forget to learn and then the assortment can get stale."

What happens next

The raised guidance reflects both the Q3 beat and quarter-to-date outperformance in Q4, according to Borenstein, who said the brand enters the closing quarter "with a lot of momentum."

Shares fell 8.5 percent to $16.85 before the release on Thursday, swept up in a broad tech-led market selloff, but remain comfortably above the July IPO price of $15. Investors weighed the results Friday.

Borenstein acknowledged the burden of proof facing fashion companies in public markets. "We're still small. We do have the unfortunate position of so many fashion businesses before us have struggled in the public markets," she said. "And so there's a little bit of show me, prove it." She added that the company anticipated the uphill battle when it listed and intends to demonstrate consistent growth over time as its core task heading into fiscal 2026.